Most Americans approaching retirement have not saved nearly enough. More than a third of those 55 and older have socked away less than $100,000, and about 60% have saved less than $250,000 (per the 2019 Retirement Confidence Survey). Clearly, even factoring in Social Security income, most people will need additional sources of retirement income.

The good news is that there are a lot of ways to generate retirement income, such as working for a few more years and tapping life insurance policies. Here are five sources of retirement income, all of which relate to your home.

A stylish silver-haired woman is smiling and holding some hundred-dollar bills.

Image source: Getty Images.

No. 1: Rental income from your home

One way to generate income from your home is to occasionally (or frequently) rent out parts of it -- or all of it -- via a service such as Airbnb or This is a particularly powerful strategy if you live in an area where many business or vacation travelers might like to stay, such as in a big city or by a beach. As an example, last year (pre-pandemic), the average daily Airbnb rate in Steamboat Springs, Colorado -- a skiing hotspot -- was around $450, while in Boston, it was $266.

You might be able to take this strategy further, if you want, by taking in a boarder. If someone rents a room in your home and pays you, say, $500 per month, you're looking at $6,000 in extra income. Plus, when you're retired, a trusted housemate can be helpful and reassuring to have around.

No. 2: A reverse mortgage

Another way to wring dollars out of your home in retirement is via a reverse mortgage. That's where you borrow against the equity of your home, receiving either a lump sum or specified regular payments. You're allowed to remain in your home, but when you leave -- perhaps due to moving to a long-term care facility or when you die -- the loan will need to be repaid. That typically is handled by selling the home.

A downside is that your heirs generally won't get your home. Read up on this strategy and learn a lot more about its pros and cons before getting a reverse mortgage.

No. 3: Freeing up money by moving to a smaller home

You might also get more money for retirement by downsizing into a smaller home. Doing so will generally give you smaller mortgage or rent payments and should cost you less in property taxes, insurance, maintenance, repairs, and utilities. It might not cramp your style too much, either, if your kids have grown and moved out, leaving you with more space than you need during retirement.

No. 4: Freeing up money by moving to a cheaper location

You might also generate more retirement income by moving to a less costly town or part of the country. This could include moving to a smaller home, but it might not. Check out the median home value in some representative cities, along with a recent cost-of-living score there (with a score of 100 representing the national average):


Median Home Price

Cost of Living

Portland, Oregon



Longmont, Colorado



Salt Lake City, Utah



Charleston, South Carolina



Nashua, New Hampshire



Atlanta, Georgia



Chicago, Illinois



Tampa, Florida



Richmond, Virginia



Yuma, Arizona



Oklahoma City, Oklahoma



Ocala, Florida



Tulsa, Oklahoma



Hobbs, New Mexico




There are, of course, lots of other possible locations that can be great places to retire.

No. 5: Side gig income working from home

Finally, another way to generate more retirement income from your home is to work there doing a side gig. That might be tutoring kids online in a subject you're good at, such as math or French, or running an online store where you sell sweaters you've knitted or wooden jigsaw puzzles you've cut or soaps you've made. There are many other side gigs to consider that can bring in needed income. If you can generate just $200 extra per week, you're looking at more than $10,000 in additional annual income.

Take some time to figure out how much income you'll really need in retirement, and see whether any of the above strategies can help you. Be sure not to ignore healthcare costs, and factor Social Security income into your overall plan, too.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.